Little Bay Restaurant lets customers set menu prices

The Little Bay Restaurant in London (UK) opened a new location recently. Instead of launching with a menu of priced entrees, though, it took a different, and to my mind, very enlightened approach. For the month of February, it put no price next to the selections, instead allowing customers to pay what they thought the food was worth. While some cheapskates paid little, most diners reportedly played fair and gave what they felt was reasonable for the food served.

And here's the inspired part. The restaurant then took the amount customers were willing to pay and used that to price its menu. Instead of guessing what the market would bear, it allowed the market to tell it what prices were reasonable. The unusual strategy also paid off for the restaurant in free press coverage, exposure they could never have afforded to buy.

Imagine walking into a McDonald's or a Cheesecake Factory or a Smith & Wollensky to find they were doing the same thing. What would you pay for an Egg McMuffin or a white chocolate raspberry truffle or a prime filet? In many cases, I see a huge disconnect between value and cost. (I'm looking at you, Applebee's -- food that tastes like a frozen food dinner isn't worth ten bucks.)